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1. The Economic Boom Why did the USA experience a boom in the 1920's· Experiences the "multiplier effect" Where the growth of one industry stimulates another· The growth of the car industry Rubber and Glass· The development of electricity products such as vacuum cleaners & fridges· Reasons· Natural resources· had plenty of oil, coal, iron and wood which provided the foundation for growth· Cheap Labor· immigrants from Germany, Poland, provided a big supply of cheap unskilled labour· WW1· didn't enter, able to supply food and materials which fuelled growth, borrowed, Invest, farmers· Government· "Laissez Faire" & Rugged Individualism. Little involvement, profits, business is business· McCumber tariff· raised import duties = home goods. Reduction in income tax = more spending…read more

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The Economic Boom Why was there a boom on the stock market?· Rose steadily up to 1928/9 where · Speculation meant that many Americans drastically rose. "even the shoeshine boy" were encouraged to invest in the stock had shares. market.· This meant people were willing to buy · Interest was high at 7% so there would be shares as they were confident they were big profits to rise. The USA began to speculate. · Many investors borrowed money to buy· People would "buy on the margin" borrow shares money to buy shares, hoping the profit · Summer 1929, $8.5 billion had been would pay it back borrowed.· 1928 there was a bull market and in 1929 1.1 billion shares were sold. 25 million people were involved.…read more

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The Economic Boom How important was the car industry?· Henry Ford in 1909 founded Ford in Detroit, the Model T saved money "any colour as long as it was black"· The assembly line or magic belt allowed parts to be brought to workers, saved time. 1920 = car per 10secs· He believed in hard work and doubled wages to $5, reduced shifts to 8 hours and had a 3rd shift to be 24/7· He would advertise attractive women: Would encourage men, and promote female drivers· His methods enabled him to lower the price to $295 in 1926. As a method of credit...Hire Purchase· The impact of Model T· By 1925 half the cars were Model T· 1927, new Factory, biggest in the world, it employed around 80,000 workers· Used steel, wood, petrol, rubber, provided jobs for over 5 million people. 90% of Petrol, 80% of Rubber· Hire purchase enabled most families to afford a car· Knock on effect on leisure ­ restaurants and hotels were reachable by car.· People could travel further to get to work, so less unemployment· Rural areas, farmers could get to places quicker so wives weren't alone· It was no longer a rich persons privilege: 1 car to every 5 people in America· Rose from 1.9 million in 1920....to 4.5 million in 1929…read more